A stronger US economy and a turnaround in Australia have helped Dublin-based Beazley post a 58% rise in profit to $US114.1 million ($121.13 million) for the six months to June 30.

“Our largest division, specialty lines, benefitted from the steady recovery of the US economy, with demand for professional liability and management liability insurance increasing,” CEO Andrew Horton said.

Gross written premium grew 1% to $US1.07 billion ($1.13 billion) in the first half, while investment income was $US46.8 million ($49.68 million), up from $US300,000 ($317,884) in the corresponding period last year.

The combined operating ratio was 90%, compared with 89%.

In Australia, Beazley’s accident and health business improved following rate rises, according to Mr Horton.

“The combined [operating] ratio of the division was severely affected by challenging market conditions in Australia [last year]. We took corrective action, with large rate rises, and the division’s performance has improved in the first half of this year.”

In the US Beazley now has 92 underwriters, up from fewer than 12 when it began underwriting business in 2004, Mr Horton says.

“The rationale behind our expansion into the US market was to gain access to business that would not normally be seen by underwriters at Lloyd’s.”

The business grew 14% to $US238.2 million ($252.91 million) in the first half, he says. “We expect our US platform to become increasingly important as we move forward.”

Beazley sees more opportunities in smaller business lines, often underwritten in the US, than in its large risks business, mainly underwritten in London, where competition has been intense and the book has contracted.

An influx of new capital from pension funds to the reinsurance market has depressed rates, with rates on renewals down 10% in Beazley’s reinsurance division, which represents 15% of gross premium.

Reinsurance claims grew 43% to $US46.3 million ($49.15 million) for the first half, while reinsurance profit fell 17% to $US26.6 million ($28.24 million).

Profit from specialty lines more than trebled to $US39 million ($41.4 million), while performance in the life, accident and health division improved to a pre-tax loss of $US1.9 million ($2.01 million) in the first half, compared with a $US7.1 million ($7.53 million) loss in the corresponding period last year.